Institutional Quality and Human Capital Development in Nigeria: Is There Any Link?

Despite efforts to improve quality human capital, Nigeria consistently scores poorly in the human development index (HDI). The significance of institutions in human development has been emphasized in recent times as countries grapple with achieving sustainable development goals. Studies show that quality institutions provide equitable and fair development opportunities and capabilities to enhance human development. This study, therefore, examined the effect of institutions—corruption, democratic accountability, and government stability on Nigeria’s human capital development index. The ARDL model is employed to analyze data from 1990 to 2022. The outcomes show that a stable political system, high levels of democratic accountability, improved per capita GDP, employment generation, and consistent government spending on essential sectors are all critical for human capital development. Conversely, high rates of poverty and corruption have negative impacts on human capital. The findings lend credence to the intuition that strong institutions have a significant impact on enhancing quality human capital through improved healthcare, education, human capabilities, poverty reduction, employment opportunities, and security. It is therefore recommended that institutional reform that guarantees human development be pursued.